House GOP: We Have to Cut Foreclosure Prevention Program Because Democrats Haven’t Fixed It Yet
Wednesday, the House is voting on H.R. 839, The HAMP Termination Act of 2011, which is sponsored by Rep. Patrick McHenry (R-NC). The bill would immediately end the Home Affordable Modification Program (HAMP) — the Obama administration’s signature foreclosure prevention program — rescinding tens of billions of dollars in funding meant to aid troubled homeowners. This move comes despite analysts predicting that one million homes will go into foreclosure this year.
But during floor debate today, House Republicans came up with a novel reason to justify cutting foreclosure relief with the housing crisis still burning. They said that HAMP needs to be cut because Democrats haven’t yet done enough to fix it:
REP. PATRICK MCHENRY (R-NC): My colleagues on the other side of the aisle have not offered legislation to fix it when they were in the majority. And so we’re left with what is required today, [which] is to root out this federal program.
HOUSE FINANCIAL SERVICES COMMITTEE CHAIRMAN SPENCER BACHUS (R-AL): You haven’t mended it. You’re talking about mending it today. Where is your bill to mend it? Is there a bill to amend it?…You can file the bill, we’ll take a look at it, but we’re ending this failure.
Of course, if Republicans were actually serious about addressing foreclosures, they could suggest their own fix for HAMP. But they haven’t. To the contrary, they have opposed all foreclosure prevention efforts, including bankruptcy cramdown and the foreclosure fraud settlement that’s currently being negotiated by the nations’ attorneys general.
Undeniably, HAMP has suffered from significant design flaws and has fallen far short of the goals that the Obama administration set for it. But the answer is not to eliminate it completely, leaving homeowners to fend for themselves. There are, instead, several fixes that could be made that would improve HAMP, including allowing housing counselors to directly approve HAMP modifications. See other recommendations here.
And if it’s really the cost of the program that’s bothering House Republicans, they could support Rep. Barney Frank’s (D-MA) effort to fund foreclosure prevention through a fee on the nation’s biggest banks. “I don’t mean to demonize, but I think Goldman Sachs and Wells Fargo and the Bank of America and Citicorp and Morgan Stanley and the large hedge funds, I think they can pay for this,” Frank said.
Instead of adopting any of these fixes, Republicans are simply letting the program disappear, because they believe that all federal foreclosure prevention efforts “need to stop.”
This post originally appeared on the Wonk Room, a ThinkProgress blog.